Rand firms against US dollar

Currencies / 28 July 2014, 6:45pm

Reuters

Johannesburg - South Africa's rand firmed against the dollar on Monday after union Numsa said its over 200,000 striking members had accepted a wage offer to end a four-week stoppage in the metals sector.

Following the announcement, the local unit strengthened by 0.33 percent, trading at 10.5450 against the greenback by 17:35 SA time.

South Africa's currency had slipped by over half a percent from its New York close to 10.5720, its weakest level since last Wednesday, before Numsa said its members would be returning to work after accepting a 10 percent increase for its lowest-paid members from employers.

“The rand has the ability to push to the first key point of 10.45, and then probably 10.40 if there is a resolution to the strike,” Cheslyn Francis, a rand trader at Afrifocus said before the announcement.

“The resolution would indicate some faith in the South African economy and we might find off-shore bond buyers piling in a bit more money,” he added.

The work-stoppage halted production at automakers and affected construction at new power plants in a country struggling with electricity supply and reeling from a recent 5-month strike in platinum sector.

Further movement in the rand is expected with the release of unemployment data on Tuesday as well as a raft of domestic economic numbers later in the week.

In fixed income government bonds were weaker.

The yield on paper due in 2015 ticked up 1.5 basis points to 6.655 percent while the yield on the 2026 paper added 3.5 basis points to 8.225 percent. - Reuters